A tax penalty, described in the Tax Administration Act as the ‘understatement penalty’ is imposed in circumstances dependent upon the taxpayer’s behaviour vis-à-vis an understatement. In essence, an understatement is a default, omission or incorrect statement in a...

Time for an advance ruling? The general rule under s 7C of the Income Tax Act is that a loan, advance or provision of credit by a natural person to a trust (or company) to which the lender is ‘connected’ (for example, a beneficiary) at a soft rate is subject to the...

PRACTICAL CONSIDERATIONS Timing provisions—dates A ‘s 7C donation’, as from 1 March 2017, is regarded as being made to a trust on the last day of each year of assessment of the trust, that is, for the first time, on the last day of February 2018 (s 7C(3)(b) of the...

1. INDIVIDUALS The maximum marginal rate for natural persons remains at 45% and is reached when taxable income exceeds R1 500 000. The minimum rate of tax remains at 18% on taxable income not exceeding R195 850. The primary rebate for all natural persons has been...

Changing the beneficiaries Existing trust structures being revisited Given the advent of s 7C of the Income Tax Act, which subjects to annual donations tax an interest-free or soft-interest credit loan claim by a funder (whether a settler, beneficiary or connected...

Davis Tax Committee Recommendations The Davis Tax Committee has just released a Tax Administration Report, dated September 2017 (see the Monthly Listing), which, amongst other things, addresses the need for a Taxpayer Bill of Rights (TBOR). The TBOR should be...